Nissan Motor is taking steps to reduce excess production capacity by halting the production of its AD compact van in November this year, as reported by Bloomberg. This decision comes amidst talks with Honda regarding a potential merger, where both companies would become wholly-owned subsidiaries of a new joint holding company.
In December, Nissan and Honda signed a memorandum of understanding to explore the merger, which has led to a reevaluation of Nissan’s business operations. The AD van, which accounted for approximately 7,000 out of 150,000 vehicles produced by Nissan Shatai at its Shonan plant in Kanagawa, Japan during the fiscal year 2023, will be affected by this decision.
According to a spokesperson from Nissan, the company’s manufacturing unit, Nissan Shatai, has not yet made any decisions regarding job cuts. The NV200 Vanette compact van, also produced at the same facility, may also face production cuts, as per The Japan Times.
It was previously reported by Reuters that Nissan Motor planned to cut 9,000 jobs and reduce its global manufacturing capacity by 20% to save $2.6 billion in the current fiscal year. This move comes as Nissan faces declining sales in key markets such as China and the US.
The proposed merger with Honda is expected to lead to significant restructuring within Nissan, with job reductions affecting production units. Both companies aim to finalize a negotiation framework by the end of this month and establish the joint holding company by August 2026. The outcome of these discussions will have a profound impact on the future of Japan’s automotive industry.
